Support

A cookie is a piece of data stored by your browser or device that helps websites like this one recognize return visitors. We use cookies to give you the best experience on BNA.com. Some cookies are also necessary for the technical operation of our website. If you continue browsing, you agree to this site’s use of cookies.

Events

Bloomberg Next marketing services allow clients to elevate their brands and extend their reach through our established and trusted expertise, enhanced with engaging event production, appealing design, and compelling messaging.

Individual Income Insights: Checking up on Checkoffs

Over the past few months, states legislatures have passed a
wave of changes to their tax codes. Along with high impact changes like
repealing a tax credit or updating tax brackets, states also quietly make
changes to their income tax returns themselves by adding or removing checkoffs.

Checkoffs allow states to provide taxpayers with a quick and
easy way to donate to charity. Taxpayers simply “checkoff” a box on their tax
form and a portion of their tax return is contributed to a philanthropic cause.
While some states like Oregon offer
a wide range of charitable causes to choose from, taxpayers in other states
may have more limited options. As of 2015, a
total of 410 checkoff programs are available nationwide with the most popular
programs being nongame wildlife preservation and child abuse prevention.

When checkoffs are readily available, taxpayers appear eager
to use them. Of the 41 states that offer checkoffs, almost
all of them receive over $100,000 in taxpayer donations and some states,
like California, receive
several million. The ease of the donation process can be a large factor in
how much a state collects. A recent change in TurboTax software that moved California’s checkoffs onto a separate
page from general information, may have resulted in a significant decrease in
total donations from $3.37 million in 2016 to $1.74 million for 2017, as
reported by Bloomberg BNA’s Laura Mahoney (subscription
required). The donation decrease caused 12 of 22 charities to miss the
minimum contribution amount required to remain on the state’s checkoff list.
California responded by introducing legislation
to alter the minimum requirement. In the meantime, checkoff-eligible charities
like the California Sea Otter Fund are advising
taxpayers on how to donate via the existing TurboTax software until it is
updated.

More Money, More
Problems

Despite the honorable intentions, checkoffs are still
subject to some
criticism. Although California is concerned about increasing checkoff
funds, the state came under fire in 2015 for not properly distributing the
funds. After
it was reported that almost $10 million in funds went unspent and other
charities went months before receiving the donations, California’s
senate reevaluated their checkoff program. Similarly in 2014, New York’s
Comptroller also
found significant delays in fund distribution. In their analysis of the
prior 10 years, they discovered that anywhere between 30 to 57 percent of
available taxpayer donations went entirely undistributed and remained in their
respective accounts.

Illinois, which added
additional checkoffs this August, had the
opposite problem. According to a 2011 Illinois Times report, Governor Pat Quinn
usedcheckoff
funds to pay state debts with the approval of the General Assembly. Between
2008 and 2010, Governor Quinn had borrowed over $1.17 million and swept
$434,300 from checkoff funds. Though borrowed funds statutorily must be repaid
within 18 months, charities that relied on using those funds were forced to rethink
their projects and budgets until then. In the case of a sweep—a transfer from a
fund with a specific purpose to the state’s general fund—the state is not
required to return any of the diverted funds. This means that taxpayer
donations for checkoffs like the Alzheimer’s Disease Research Fund, are not
guaranteed to be used for their intended purpose. The state
borrowed $135,000 from that organization, but did not have to pay back the $112,500
it swept.

Choosing Checkoffs

In addition to monetary issues, states sometimes come under
scrutiny for their selection of eligible checkoff programs. Colorado, the first state to offer
checkoffs in 1977, added the Family Caregiver Support Fund to its growing
list in June. While the
state offers a wide range of checkoffs
to its taxpayers, some
have complained that the checkoff selection process is unfair and based
heavily on legislators’ personal connections and interests.

All Bloomberg BNA treatises are available on standing order, which ensures you will always receive the most current edition of the book or supplement of the title you have ordered from Bloomberg BNA’s book division. As soon as a new supplement or edition is published (usually annually) for a title you’ve previously purchased and requested to be placed on standing order, we’ll ship it to you to review for 30 days without any obligation. During this period, you can either (a) honor the invoice and receive a 5% discount (in addition to any other discounts you may qualify for) off the then-current price of the update, plus shipping and handling or (b) return the book(s), in which case, your invoice will be cancelled upon receipt of the book(s). Call us for a prepaid UPS label for your return. It’s as simple and easy as that. Most importantly, standing orders mean you will never have to worry about the timeliness of the information you’re relying on. And, you may discontinue standing orders at any time by contacting us at 1.800.960.1220 or by sending an email to books@bna.com.

Put me on standing order at a 5% discount off list price of all future updates, in addition to any other discounts I may quality for. (Returnable within 30 days.)

Notify me when updates are available (No standing order will be created).

This Bloomberg BNA report is available on standing order, which ensures you will all receive the latest edition. This report is updated annually and we will send you the latest edition once it has been published. By signing up for standing order you will never have to worry about the timeliness of the information you need. And, you may discontinue standing orders at any time by contacting us at 1.800.372.1033, option 5, or by sending us an email to research@bna.com.

Put me on standing order

Notify me when new releases are available (no standing order will be created)